• Trump effect on world energy will benefit India

    Energy demand in the US and the West will remain flat because of increased energy efficiency. The United States, India, and the world are waiting to see what President Donald Trump’s words “only America first”, “buy American, hire American” and “protection” to “make America great again” mean in practice. What Trump means for the world’s energy policy and US-India cooperation on energy is particularly important. Energy is deeply entwined with the fundamental issues of international security, economic development, human health, climate change, and a whole host of subsidiary issues. A wise man once said, “Where a door is closed, a window is opened.” This metaphor is applicable to energy policy under Trump and what it means for India and the world.

    For example, Trump’s overwhelming emphasis on fossil fuels may be closing the door of US leadership on climate change and environmental protection. However, Trump’s stepping back on environmental effects of energy gives India the opportunity to play a pre-eminent world leadership role on this issue. Paradoxically, the Trump emphasis on fossil fuels, along with nuclear and hydro, also presents an opportunity for US-India cooperation on environmentally responsible energy security across the board. US energy policy is like a great ocean liner. It cannot be turned quickly and is subject to forces that are not within the control of the ship’s captain—even if that captain is Donald Trump. In the United States particularly, these forces include supply and demand as expressed through the market and free enterprise.

    Against this background, here is what the Trump effect will and will not mean for world energy policy. First, no change by the Trump Administration will alter the increasing demand for energy in the non-OECD countries of Asia, mainly India and China, as the main driver of world energy policy. According to the International Energy Agency, India’s energy demand will grow more than any other country’s from now to 2040. This demand must be accommodated. On the other hand, energy demand in the US and the West will remain relatively flat—not for lack of growth, but primarily because of increased energy efficiency. This shows that India and the world must view efficiency as a fuel and that a mutually beneficial system for moving energy technology and sources to India is highly desirable.

    Second, oil and gas are now in the US energy driver’s seat. Trump has appointed a plethora of men associated with oil and gas production to top posts. In a phrase made famous by Sarah Palin, former governor of Alaska and Vice-Presidential candidate, “drill, baby, drill” is winning out. The US is already the largest producer of oil and gas in the world, and under Trump such production will only become larger. The US was already projected to be energy independent by as early as 2018—meaning that it will be exporting more energy than it imports.

    The Trump Administration is likely to favour many international measures that increase the international exploitation of oil and gas. The Administration has already signalled approval of the Keystone pipeline that will bring oil from Canada through steel pipes made in America. There will be rapid permitting of LNG export projects that should benefit India. Third, Trump will decrease environmental regulations promoting renewables and will probably withdraw the US from the Paris Agreement. Trump Cabinet nominees acknowledged in their confirmation hearings that humans are contributing to climate change. However, they consider the degree of contribution and what to do about it as open questions. On the campaign trail, Trump said he would “cancel” the Paris climate change agreement. Later he said he had an “open mind” on the subject.

    However, Trump will certainly retract the Obama Clean Power Plan. This plan is the main mechanism for the United States meeting its commitments to lower its CO² emissions by 26%-28% of 2005 level by 2025. There is also a pledge of the developed nations to mobilise $100 billion a year by 2020 to fight climate change. The Trump administration is unlikely to see this as a priority. Thus, withdrawal seems likely. Fourth, in spite of Trump policies, natural gas and renewables will continue to replace coal in the US and world energy mix. India should capitalise on this trend. Trump loves coal. His attacks on Obama’s supposed “war on coal” were instrumental in his victory in several key states. While Trump has promised to bring back coal, the continued emphasis on gas fracking and technological developments in horizontal drilling are working against the resurrection of coal.

    With the rise of LNG, the phenomenon of natural gas competing with coal is becoming worldwide. This phenomenon is being driven by both price and the superior performance of gas from an environmental perspective. Solar and wind are precipitously dropping in price and have obvious environmental advantages. The shift to renewables backed by natural gas will continue regardless of Trump’s preferences. Under Prime Minister Narendra Modi, India has already taken a strong position on renewables. India’s leadership of the International Solar Alliance is but one example. Trump’s scepticism about renewables will provide further scope for India to assume leadership on solar and wind.

    In regard to nuclear and hydro, Trump seems to favour these as well as fossil fuels. Thus, India may find it easier to cooperate with the US in making all sources of energy more efficient and environmentally responsible. Thus, there is good news and bad news about the Trump effect on world energy policy. The good news is that it offers the opportunity for closer cooperation with India and most other nations on sources of energy across the board. The bad news is that the emphasis on the exploitation of fossil fuels may overwhelm US leadership on energy and the environment.

    The threats of air pollution and climate change to the people of the world are real. The last three years have each been the hottest years on record. The health of hundreds of millions in India and around the world is being severely harmed by air pollution. The World Health Organization estimates that some 600,000 Indians die because of air pollution every year. Long term economic growth will be impeded by pollution and climate change if they are not checked. The window of opportunity for US-India and world cooperation on energy from all sources is wide open. The question is whether we will be wise enough and diligent enough to take advantage of that opportunity or become mired in a cycle of enmity and narrow self-interest that will impede rather than advance the world energy system. Ben Simmons Jersey

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